The Grand Dame of Twin Cities Retail

SOUTHDALE CENTER VALUES its rich 43-year history, but its commitment to building a dynamic tenant mix is rooted firmly in the future.

Southdale opened in 1956, billed as the first regional enclosed, climate-controlled mall built in the United States. "That was the selling point because you could shop year-round in the comfort of coolness in the summer and warmth in the winter," says Christopher Cummins, Southdale general manager.

Although few shoppers remember that early claim to fame, the shopping center has maintained a firm grip on its reputation as an "institution" of shopping in the Twin Cities. Traditionally, Southdale has been a destination for shoppers all over the seven-county metropolitan region and state. And over the years, the property has retained its strong base of loyal customers.

The early years So how has this mall remained such a viable, competitive retail icon over more than four decades? Location played a significant role. Minneapolis-based Dayton Hudson Properties, now Dayton Hudson Corp., picked the 94-acre site with care - zeroing in on the buying power of the upscale Edina community, as well as positioning the property firmly in the path of new commercial development.

At the time Southdale was built, the center had few neighbors. Today, the France Avenue strip in the heart of Edina has developed into one of the Twin Cities' primary retail and commercial hubs. "I don't think there would be a retail corridor there without Southdale," says Linda Zelm, a vice president at Exeter Realty Co. in St. Paul.

"It is one of the most successful regional malls that I have seen," says Kathleen Nye Reiling, a principal with Colliers Towle Real Estate in Minneapolis. "Its location is tremendous. It's got good demographics, high income and density."

In addition, the renovations have kept it fresh and current, Reiling says, and Newton, Mass.-based Wells Park Group, which manages the center, has done a good job of adding new tenants in recent years. "Southdale is still the queen of the local malls," she says.

Originally, the shopping center was home to 64 specialty stores, and it was anchored by Dayton's and Donaldson's department stores. Two major renovations gave the center the contemporary boost it needed. The first expansion occurred in 1972 when the mall added JCPenney as a third anchor, as well as 43 more specialty stores. In 1990, the center underwent another major expansion and renovation project that included a new, 360,000 sq. ft. Dayton's store and 50 additional specialty shops. That project increased Southdale's GLA to its current size of 1.24 million sq. ft., and added a three-deck parking ramp.

Competitive threat The last renovation was prompted in part by nearby Mall of America, which was gearing up for its own 1992 opening. Dayton's had publicly stated that it did not intend to be part of Mall of America, and the retailer threw its support behind existing mall locations.

Historically, Southdale had proved to be one of Dayton's most profitable outlets, and the retailer wanted to shore up the center's position in the face of increased retail competition from Mall of America. "They wanted to recommit to the marketplace and emphasize that Southdale, and Dayton's in particular, was an institution of shopping in the Twin Cities," Cummins says. "Dayton's built a state-of-the-art store, which is still state-of-the-art today, eight years later."

Despite the improvements, Southdale has felt the competitive sting of its largest retail neighbor. "In terms of being the No. 1 retail destination, certainly the Mall of America with its stated number of 40 million visitors a year and 70% tourist traffic has taken away a lot of our thunder, unfortunately," Cummins says.

"If you have 2.5 million sq. ft. of entertainment and retail open up five miles from your front door, you're bound to experience a loss," he says.

Traffic and sales numbers were off at Southdale for a couple of years, but business has returned to pre-Mall of America figures. Although Southdale sees fewer tourists, the center continues to pull from a growing retail base among a thriving residential and commercial corridor.

Entertaining plans Southdale also has some major plans in the works to energize its entertainment mix. The mall has a letter of intent signed to bring in an 18-screen theater with stadium-style seats. The 127,000 sq. ft. addition could open as early as spring 2000. "The nice part about it is that the main entrance will be through our third-floor food court area," Cummins says.

Conservatively, the theater could create an additional 1.5 million visits each year for Southdale. "That will certainly enhance the ability of our tenants to benefit from walk-by traffic, and result in increased business for everyone," he says.